Gulf Investment in Pakistan’s Domestic Bonds Reaches $188 Million in October

KARACHI: Foreign investment in Pakistan’s domestic bonds surged to $188 million within the first nine days of October, reflecting a notable increase in overseas interest and providing an additional source of dollar inflows for the government.

According to the latest data from the State Bank of Pakistan, investors from Gulf countries have shown a particular preference for domestic bonds, with longer-term Pakistan Investment Bonds (PIBs) attracting significant capital. During this period, treasury bills garnered $78 million, while PIBs received $110 million. Historically, Pakistan has aimed for greater foreign investment in government securities, although previous inflows were predominantly limited to short-term instruments.

This emerging trend could bolster the country’s foreign exchange reserves, particularly after Pakistan recorded remittances of $41.5 billion in FY26. However, the nation continues to grapple with weak export growth, which has contributed to a widening trade deficit and challenges in maintaining a current account surplus.

In contrast to the robust inflows, foreign investment outflows during the same nine-day period were recorded at $38.16 million, significantly lower than the inflow figures. This disparity highlights the potential for sustained foreign interest in Pakistan’s financial instruments, paving the way for future economic stability.